Dutch carriers abused data retention law for marketing purposes

Some Dutch telecommunications and Internet providers have exploited European Union laws mandating the retention of communications data to fight crime, using the retained data for unauthorized marketing purposes, according to a report by the Dutch Ministry of Economic Affairs' Radiocommunications Agency.

The report, made public on Monday by Dutch digital rights organization Bits of Freedom following a freedom of information request, was completed in April 2012, but carriers and ISPs were not prosecuted for the breaches reported.

Bits of Freedom and other digital rights groups called on the European Commission to prevent further abuse of the European Data Retention Directive, which requires ISPs and telecommunications operators across the E.U. to retain connection data for a period between six months and two years, mainly for the purposes of investigating, detecting and prosecuting serious crime and terrorism.

The Netherlands introduced its data retention law in September 2009, requiring telecommunications operators to store data for one year and Internet providers to retain information for six months.

While the companies can legally use the retained data for billing, market research, sales activities and value added services, 40 of the 229 companies that responded to a mandatory survey said they used the information "solely for purposes other than the legally permitted processing goals," according to the report. Still others said they used the data for both legally permitted and non-permitted purposes.

The agency suspects that the companies use the data for instance for illegal marketing purposes, said Mariël van Dam, the agency's spokeswoman on Monday. She couldn't immediately comment on other possible uses.

In order to use traffic and location data for purposes other than billing, the service provider has to obtain the customer's explicit consent, and customers should be able to withdraw this consent at any time, according to the report. Only 147 of the 229 providers asked for consent, presumably largely through their terms and conditions, the agency said.

The law was mainly violated by medium-size and small operators, while major service providers complied with the law, the report said.

The Radiocommunications Agency decided at the time not to punish the violators because the research was done relatively shortly after the law was introduced, said Van Dam. "We said that we should give the companies a chance to comply with the law."

The agency is now conducting a follow-up study and expects to have new results in early 2014, after which the agency plans to start enforcing the law, she said. Violators can be fined up to a maximum of €250,000 (about US$339,000), she said, declining to comment on the preliminary results of the research.

Bits of Freedom spokesman Ot van Dalen said that the organization had warned of the potential for abuse of retained data by telecom and internet providers. The stored data is a goldmine for companies, and could also be abused by secret services, he said, calling for the abolition of the data retention law.

However, he said, because the data retention law is mandated at a European level, the Dutch couldn't abolish the law if they wanted to. He called on the Dutch government to reduce the mandated retention period to six months, the minimum possible under E.U. law. He also called on the Dutch government to commit to ending mandatory data retention at the European level.

It is time for the European Commission to take action, said Joe McNamee, executive director of European digital rights group EDRi in an email.

"It is nothing less than disgraceful that the European Commission has repeatedly taken Member States to court for failing to implement the Directive but has not lifted a finger to take action when the Directive was implemented in ways that undermined the fundamental rights of European Citizens," he said.

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